The power of decentralization
We need Cardano and other projects to take full advantage of the potential of decentralization.
With increased adoption, a clash between the old and the new paradigm is inevitable. Fiat currencies are surrounded by the legal system and governments. Governments and central banks use monetary policy to boost national economies. People and companies are required to pay taxes. We need the banks to take a loan. Ledgers must be kept in national currencies. All institutions have to use national currencies and that is also true in cases where people have to pay fines. Coins are used as a means of interaction with the environment. While it is easy to freeze a bank account, it is impossible to do so with cryptocurrencies. Hence, governments would lose control of people when they allowed them to use cryptocurrencies. The use of cryptocurrencies is a kind of revolt against governments and it can hardly be imagined that in this way it has a chance of success. Collaboration with governments has more possibilities and we have already seen that some governments are not afraid of cryptocurrencies and even accept them as a means of paying taxes.
We can see basically three possible ways how the current infrastructure can connect or adopt a new decentralized infrastructure. Let's consider only the positive scenarios from the cryptocurrency point of view:
• Governments adopt cryptocurrencies and provide the legal system and rules to resolve disputes.
• Rules and a reliable infrastructure layer will be created in a decentralized manner. Therefore, the current infrastructure can be completely replaced. Governments let it exist as a parallel system.
• Something between the two previous points. Governments will adopt all decentralized infrastructure. Old and new infrastructures will merge.
The cryptocurrency came to the world with a clear vision of building an alternative to today's financial world. We enter a phase where some people celebrate the entry of institutional investors and banks instead of trying to use cryptocurrencies in their daily lives. Immerse yourself in the phenomenon.
Cryptocurrency transactions are irreversible and we can see privacy trends. Governments don't want to lose control of money completely. The government would not know how much money people have and earn. It would also be very difficult to force someone to pay a fine or enforce some legal orders related to money. Building decentralized infrastructure for cryptocurrencies is much smarter. Not only will it be required by people if decentralization is to succeed as a new paradigm, it will also be easier for governments to use as a whole. Decentralization is about less reliance on human decisions and more about strictly following the rules written in source code. The main focus will be on the definition of rules written in the code. It is easier to harmonize the current infrastructure with the decentralized one than to try to use cryptocurrencies with the old infrastructure.
We need to improve scalability, have a secure and reliable smart contract technology, the ability to create tokens that represent assets, stablecoins, Oracle services, digital identity management, and many other things. Many of them are still under construction or the technologies already available have not been tested by time. We've seen a lot of flaws in the DeFi space. All these functionalities cannot be built and managed by a single project. Many decentralized projects are more likely to be successful and Cardano may be one of the biggest players on the playing field.
Abstract.
https://cardanians.io/en/cardano-will-be-needed-when-crypto-goes-mainstream-123
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